average physical product

a firm practices input substitution when it

at a given level of wheat output, one more unit of labor would generate a marginal revenue product equal to $10 and one more unit of seed would generate MRP equal to $30. A unit of labor cost $6 and a unit of seed costs $12. The farmer would like to minimize the cost of production. She should

cartels usually succumb to divisive forces caused by

in the cigarette industry either R.J Reynolds or Phillip Morris, for a time, raised prices twice a year by about 50% cents per carton. the other firms in the industry raised their prices by the same amount. economists call this

a perfectly competitve firm would be willing to remain in the industry in the long run at zero economic profit because

the process of adjustment to a new long run equilibrium in a perfectly competitive industry is complete when

no firms want to enter or exit the industry
every firm had adjusted its production process to make the most efficient use of its resources
investors in the industry receive the standard economy wide rate of return on their investments